5 Successful Real Estate Investing Tips for 2020 - Millennial Money

so I think the market trends are the most important you want to go as Wayne Gretzky says you want to go to where the pucks going you know not where it is right where do you find this knowledge and should you hire some you don't need anybody know Realtors are generally idiots so my suggestion is that you just do it yourself and go to go to things that you know are macro base hey guys it's Alex for another millennium money and today I'm with Ken McElroy rich eye advisor and the reason why Robert Kiyosaki is crazy successful in real estate today you're gonna learn the top 5 things you need to know to get started with your first investment in real estate I kind of want to start off with which will tie into that what we're gonna get into later but basically your background and what your first investment was like - how many you have now and how many deals you've shoot Robert so I was super confused at a university I barely got you know to school my parents never graduated from college so you know I got there through sports and and when I when I first got out I didn't really know what I wanted to do and I ended up while I was a senior in college managing an apartment building and you know the guy's like hey you know free rent I go in you know what I mean so literally that's how I started so I got on site and I was managing I didn't know what I was doing but I grew up doing a lot of construction so I knew how to fix stuff and and I also knew that people needed to pay rent and if they didn't they you know he needed they needed to be out so property management is not that difficult but there's a lot to it and so that was my very first experience around real estate and so from there I was managing a 60 unit building and I remember like about two months into it the owner drives up in his new Mercedes and he comes in really awesome guy and he's like hey thank you for increasing the occupancy and cleaning this place up and you know and I already knew how much money I had you know increased for him and I just really was like wow like wall I'm on the wrong side of the desk here you know like how do I get on that side you know seriously I had no clue I was about ready to graduate and so I got my real estate license I went to work for a company in Seattle which is where I'm from and worked for them for ten years and learned I manage about 20,000 apartments up and down the western United States after I got my real estate license and that was an incredible experience and so at some point I just decided okay I need to start owning these right and and so I started small like I think a lot of people should I started with a you know a single home and then duplex four-plex eight units you know now you know now we have about ten thousand apartments value to right around a billion dollars so it's just been crazy 250 employees where you know we build them we buy them we renovate them we do we have our own property management company so it's been quite a journey it's been awesome it's been a great industry for me you know I've been living passive income my whole life and so when I met Robert and Kim you know I was raising money and you know as you do you quickly run out you know you can only save so much and invest and so I was looking for investors and and somebody introduced me to them and and Robert was super clear that one property management was super important and most investors don't believe that so we completely lined there because that was my background and second passive income cash flow you know as opposed to capital gains and I tell you what we just became lifelong friends after that 20 years ago they've been investing with us we have thousands of investors now they've been investing with us for 20 years and it's been awesome and that's how I got involved with rich debt yeah and then that's one thing I love is the fact that you said you went from going to that side of the desk of just managing the properties so now you know investing your own finding partners raising capital and so that's when you can see it can be done yeah yeah I tell you it's super scary along the way every time I mean you know I mean you don't know what you don't know yeah and to be able to put yourself out there and ask questions and you know try to find mentors and things that's all how I did it I did it super organic the internet wasn't around at that time and you know you just gotta ask yeah and then huh and how many units do you have right now um we I think we're around 7000 now we were at ten about a year ago we sold I sold about 350 million dollars were the stuff in the last 12 months I know Robert and Kim always oh like give you the credit to their success and real estate because they basically don't even look at the deals and you just help them find them and they're able to give you the money it's up it's not taxed and reinvest their capital gains and you help facilitate that yeah yeah it's really it didn't start that way I mean they were super diligent you know before when we first got together they were going to properties with me understanding the numbers and you know but then you know after a couple years then you kind of build this trust in this relationship but you know in the beginning they were very diligent on you know and I think that's what happens a lot of times as people throw their money around you know and they can get burned okay and you mentioned earlier that you sold a couple units of your units why is there a specific yeah yeah whoa so real estate is a timing thing so you know you have to get everything set up so what I mean by that is you have to have your capital together your debt your equity your property management and all those kinds of things set up but then you don't want to buy just like anything when things are high you know so you know by you know you don't you buy low sell high exactly right so you know I bought a lot of stuff and you know oh six to about you know 2012 and you know and we paid you know great prices for all that stuff and I don't know if we're at the top but it's close enough for me and we've made enough on our property that we decided to you know take some chips off the table if you will and as my buddy said he's like you know you never go broke by making a profit so you know what I mean so you know some people really try to time things nothing wrong with that but you know were the signs to me look like the cycle might be peaking and so we just decided to sell kept our golden goose kept the rest and so I'm glad you touched on that because I know market trends can be important and so that kind of jumps into a question that I was going to ask later but my issue with kind of timing things is for example we were always waiting for a crash to happen right a lot of Millennials are like whatever when does the next crash gonna happen and we've been constantly hearing this year this year by the end of this year and it never comes so it's like I don't I know personally I don't want that to stop me but then what do I do if it's a seller's market the question right like I get that question it's the right question first of all absolutely is the right question so they're on to something the reason they're asking that question your generation you know my kids generation all my employees two-thirds of the workforce today is our Millennials you know I get it it's because they've never seen one yeah well they they were too young right yeah I mean there has been one but you look at the last crash it was 12 years ago right so I mean you know that we nobody was really investing then so the the there are there are still deals to be had trust me we're still doing stuff they're a lot harder to find you have to be a lot more experienced to know what to look for but the right time to buy is definitely after a crash you know you want to you know when there's blood in the water the problem with that timeframe though I will let you know is everybody's freaking out so the banks are freaking out and everybody's freaking out so there's no money you know even investors so why would you buy now like so it's the opposite you know ever he's waiting for a crash but trust me I bought during crashes and there's you know there's not a lot of money flowing around people are like wolf I'm gonna hold what I got you know kind of lived through this so there's you know there's psychological barriers on both ends right on when it's high and when it's low yeah and so for me personally I know that it's this is a barrier for me because I remember last year I mentioned to you that I did want to start investing and I found the property and everything was right but it's scary because to think that I might put money on to this property and then what if next year there's a crash so you mentioned about finding the resources and things like that how do I get educated so it doesn't sure well I think you gotta take a look at what a crash does first of all so what happens during a crash people move to rentals yeah and so that's what happened the last one you know so that's a good thing if you're buying rentals but if you're buying them too high you know it's not a good thing right so I was just I met with a guy yesterday's from Mexico and they're doing a bunch of stuff in Argentina and Spain and they bought some property in Old Town Scottsdale he paid three million bucks an acre I was like oh my gosh like and I started putting the math together and I said dude you're not gonna make any money like you your rents have to be over three thousand dollars a month and that's just not what the market supports and so it's math all of its math the the land plus the buildings plus the rent you know what I mean and so if you understand you have experience and you can kind of ask those questions it all starts to make a lot of sense you know it really does and so there are tons of good deals out there you know I I personally think the most it's the most exciting time for Millennials to start businesses you know and so while it's great to have investment properties and all those kinds of things it is a timing thing and so but there's no time better to start businesses yeah you know you can do it on your phone with an app and I mean you know you can be anywhere you want you can be in Thailand and run a company in the US it's awesome I'm you guys are really coming up sweet yeah we have a lot of opportunities and I'm really thankful because some people say it might be harder for us which there's debates to to justify both but I really do think it's an incredible time as because we have resources if we do relat what to invest as opposed to back then where there was barely any of this knowledge and that's why I also love your book because it's my favorite book by far because it is it really is the ABCs of real estate investing and it makes it very simple and so I kind of want for viewers maybe if they haven't read any of these books what's the first thing that someone should look for when they're investing in a property well yeah so what I think a lot of times what happens with people is they they invest in a house or a property or land or something like that and they don't really understand the bigger picture so and I'll just give you a bunch of examples so the market is much more important than a property the market itself so right now Phoenix Arizona is on fire right it's growing like crazy of people moving here there's cranes in the air and all that kind of stuff the reason that's happening is because we had over 300,000 people moved to the state of Arizona last year that's the reason period yeah okay so that created demand on everything it created a man on housing if you're buying it created a man on the buy side if you're renting it created a man on the rent side if you're buying a car it created you know it doesn't really matter like so so you just you just got to look at population trends and demographics right so and conversely you can go to another city that you know people are exiting right and these these this informations everywhere you know what I mean yeah I mean u-haul does a great deal on this you know they how many you halls are leaving and how many you halls are coming and that's out on the internet so there's all these this great information of people turning in driver's licenses getting new ones all these demographics that you can actually see so you know you wouldn't want to invest in like Detroit right because right now that there haven't you know although jobs moved away from there and you know what I mean in the Midwest is also not not very vibrant in my opinion yeah you want to go as Wayne Gretzky says you want to go to where the pucks going you know not where it is right so so you want to kind of so I think the market trends are the most important and and population trends employment trends and when you're searching in this market would you say it's best to maybe do it on my own since it's my first time or hire someone because I know that for example when you had your first property you already had the knowledge of property management and you had your real estate license and so I'm for exam finished my real estate course and I just want to know yeah I'm excited but um where do you find this knowledge and should you hire some you don't need anybody no Realtors are generally idiots I'm telling it's just a truth you know they're they're working for tips and they just get listings and that's what they're focused on a lot of times now I've met some really really smart ones but generally they're just taking people's listings and putting them up on the internet so my suggestion is that you just do it yourself and go to go to things that you know are macro based you know like like for example in two weeks I'm going to an economic conference about Arizona it's it's gonna talk about you know what each city's doing how they're trying to attract businesses etc etc etc right okay that's meaningful to me because you know as the city's imposed tax and impact fees and all the kinds of stuff it could be resistant you know as like the state of Oregon I'll give you a great example state of Oregon just passed a rent control law period the whole state which I get it like things are becoming expensive and rent becoming expensive I totally get that but what do you think's gonna happen to the people that want to buy in Oregon or invest is who's going to invest in Oregon yeah now in the Reynolds side right nobody from Wall Street so well now what's going to happen is there's not gonna be enough economic development going on because they're gonna restrict their their income right and so so these are things that are happening all over the place you know I'm not bashing Oregon for passing a rent control off I'm just saying the facts are the facts money goes to where it needs to go and the minute the government steps in it and you know it creates a barrier that's why you know you know San Francisco and LA the reason or you know New York the reason why those markets are so expensive is because you have a lot of people with very few rentals period yeah so it's the same everywhere so you know if you're trying to buy something on the outside of town you know a mile or two you know outside of the city core you know and there's no renters it's your own fault right so you want to try to be where the jobs are and pay a good price you know what I mean and that's something I love too because I mean you you actually study before moving into any location correct and I that's brilliant because maybe that's something our viewers didn't think of before and so let's say once you've selected the market what's the next step after that yeah so what's your super pumped about a market like you know what I mean like there's all kinds of great things happening all over this country I mean you know big stuffs going on so once you kind of identified okay this is you know this is happening then you start getting into the economics around it so for example is there a housing shortage you know there may or may not be right so if there is then that's the opportunity okay we're gonna really go hard down on that you know I own a bunch of self storage units for example you know when we look at where we're gonna put a self-storage we obviously want to put them where others aren't right you don't want to be across the street and down the road you don't want you don't want six options on one main road right it's pretty common sense right but you go five miles this way or ten miles this way it might be an amazing spot same same sub market you know what I mean same thing with office buildings which we own or same thing with apartments so so you got to kind of take a look at that and then from there if you know you know if we're trying to buy something it's just math you know rents minus income or rents minus expenses equal Noi you know net operating income and I have that in the book yeah and if you know if that is super positive and you put your debt on afterwards and there's cash flow it's a go for me it's always cash flow based you know if I'm gonna put you know 10 grand down or 100 grand down or $1,000,000 down it doesn't really matter I always look at what's the property gonna produce for me or my investors you know because it all boils down to return every single time so it's just math at that point so it's basically location location location and then comes the math right yeah but at this point then would you say I should be working with a professional oh yeah yeah yeah now I say that kind of tongue-in-cheek you what you wanna if you're gonna invest your money in my opinion you need to understand who you're investing it with and you need to understand the questions that you're asking I think that's the biggest problem with the financial services and the wealth management people you know what I mean they just scoop people's 401ks and they scoop people's retirement money and all that stuff there's nothing wrong with that but those people don't even know what they're invested in they just get their quarterly statements and you know they either went up or they went down right and then they meet with them once a year it's ridiculous really and so you got to take an active you have to be very active on your own investments period and you have to understand it so if you're going to invest with a guy like me you have to be able to ask all those great questions and you know so your viewers here you know they're gonna they're gonna have more knowledge than somebody that isn't watching you know what I mean yeah so really important and and then I think that's something I love too because we sometimes say that being an employee can be a negative thing but you were an employee while receiving your education because you were working in the right environment and so I really think that is key because for example in my family we do investments together and so I'm able to learn from that and while also working at this company get that education so that I can be prepared if the market does crash or any other any other other problems that you mentioned before and so I think that's actually why I want to also link in the description in your books or your channel because you have a YouTube channel and they see how much education you provide our viewers and so I think that's something that we should all start off with to the education not just the professionals and the more of course all that's important but finding those resources you it's listen I I'm if you love what you do and you're an employee continue to do it that's not the issue the issue isn't quit your job and go do something that I've never believed that you should do what you want to do you know what you're happy with and all that kind of stuff and you know can you take that and make that your own business probably yeah you know at some point but even if you can't the the bigger issue is do you really want to give your part of your paycheck away through your through your employer whoever they have hired to invest it period and you know is that going to what's that gonna do for you what's gonna it's not gonna do anything you're gonna learn anything you know what I mean and so financial education is so important no matter where you are and you know you know it's so simple people people argue with me you know my house is an asset I go who loves the bank I go exactly it's the bank's asset yeah it's not you know it's not yours you might have a little bit of equity this year but what about next year you've seen where that can go and and and then inflation it's so simple when Robert says savers or losers how about I go so okay so you want to stick your money in a bank that's making less than 1% and what's inflation 3 okay so there you go you're negative 2% a year period on just your savings so once you start to you know and unfortunately school doesn't really teach that you know once you start to realize that you know if you can just beat inflation all you're really if you couldn't if you can make 3% a year on your money you're flat you're basically even you know you get the same buying power year over year but if you can make eight ten twelve fifteen percent on your money that takes real estate knowledge or that takes financial education no and and like you mentioned and financial education Robert always credits his wealth to the financial education but also to his team and and what you do when what all his other advisers do and so even for a starting millennial I know that okay Robert Kiyosaki he's a millionaire but would you even say it's important for Millennials are starting off to have their team oh yeah yeah and I think actually the bigger thing my big there were a couple shifts When I was your age one was I started to surround myself with people that were better people you know I grew up pretty poor and and so I went back from a high school reunion recently and you know there's a lot of people that kind of stayed at that spot you know 30 years later you know what I mean so what I what I mean by that is as you know I got a I got a really good buddy that is a very good musician he said if you're the best musician in the band it's time to find another band do you know what I mean and so that's what I've always I've always tried to put myself around people that are a little bit smarter a little bit better and so that for me what that's what the advisors are you know I honestly I didn't know what about tax before I met Tom wheelwright and he's on our team and now I'm learning a lot about tax and same thing with Robert and Garrett and Andy you know they they're teachers and so yes and so that was the first thing and so that could be your team just there you know as Jim Rohn says you are your five the people you are the five closest to period your friends that's who you are and so you know if you know they need to stretch you and educate you and yeah there's the thing that goes it's your network is your net worth yeah and it's totally true I mean yep that's the very first place to start with the team in my opinion because and then then just go out and start to look for mentors I have had mentors my whole life so I'm I've had you know a mentor to to run marathons I've had you know mentors to workout I've had mentors to help me write books I've had mentors to help me speak you know I've had mentors to help me raise my family and I've never paid for one not one and it's funny to me because when I went through school I'm trying to teach my son this right now he's a junior and at university Arizona you know I'm like use your professors they are mentors there they want you no no none of the kids go in and talk to these people yeah you know it just blows my mind right they're standing in front of the room I know I know it's cool right no I I did the same thing yeah I'm not I'm trying not to throw stones here I understand that like I look back I'm like man these people I look at some of them and they're so smart you know and I ran into one that was a you know had a big boy job in the Seattle area and he was one of my teachers and I was like I was playing golf and we got up hooked up in the same force and I said I made a massive mistake not to meet with you more these folks are all around you know whether they're your parents or your uncle's aunt's friends your friends in Roberts case it was his best friend's dad yes so you just got a you know what I mean thirsty for knowledge you know you have to be mm-hmm and I think also another because I was talking to my friends before the show and I wanted to know okay what do you want to get out of this right and they of course you probably get this a lot but it's you know they don't have money or they have bad credit so what exactly can this person do like are there other financed off financing opportunities yeah starting off what can I do they don't have these it's the greatest question it's the biggest obstacle people use it all the time I don't know money and my credits bad okay therefore I can't do anything we listen people invest money with people that understand financial education trust me I started with no money Roberts are with no money all my friends started with no money some of us have been bankrupt some of us have lost businesses it's been all kinds of things that happen and it just is the way it is but if if you're if you have financial knowledge then that's when people invest they invest in you so I'll give you an example I bought a there's piece of land that came across my desk play I don't know three months ago it was a residential piece on a major road in town but it had a billboard right in the middle of it and so everybody was looking at that trying to build it and develop it it had been on the market for I don't know almost six months I was looking at the Billboard so I call up somebody I don't know anything about I'm like hey you know is this a good location for a billboard he's like oh my god yes I go what kind of revenues he goes we could probably do two to three grand aside well the whole year that billboard had produced $5,000 for one whole year okay but everyone's looking at it for something so I bought it I paid 290 grand for the thing for the property I hired this guy he now now I've got four grand a month coming in on this billboard to 2 grand decide I put Annie's been around it and then I sold the land ok so I just created 50 grand in passive income I have no I have no investment that's financial knowledge that's what I'm talking about you don't need money to make money you know now maybe you don't have the 290 grand but that's ok that's when you go to an investor and you say hey give me 290 here's my idea I already met with a billboard guy right it's a plan and then they're gonna give you the money like that you don't need money and then maybe you split the deal with him 50/50 maybe make 2 grand a month it doesn't really matter the point is its knowledge it's absolutely knowledge it's the same way with real estate you know apartments or commercial office I bought a commercial office building you know right on Scottsdale Road you know I paid like hardly anything for it because it was vacant and the rents were 50% under market 3 years later you know I've increased it 150% you know it's literally financial knowledge and you don't have to be the person that does it all you just have to find the people like even on my office building I don't know anything about office buildings but I knew guys it did and I made sure I had the right people you know helping me with it and I've learned a lot you know same with self-storage you know my first self-starter you know how self-storage worked you know I just you just gotta go do it yeah yeah and find people that you know knowledge is money's made in the mind yeah it's made with what you see and what other people don't see one of my favorite stories from Kim is she cuz she was talking about how one of her first properties and she what she first said was she found the property so that that way she could want it be creative I mean she didn't have any money use some credit cards sold the silver that she had been accumulating and then that that was her first deal and so I think you really nailed it when you talk about being creative because the opportunities are endless and they're always gonna be there yeah yeah I mean things are more expensive than they were when Robert bought his first condo in Maui but he paid for it with a credit card yeah I'm telling you it's there right I talked to a guy yesterday there people buy an HOA foreclosures which me I'm like that's brilliant you know these are people that haven't paid their HOA assessments and they go in and they clean it up and also they have these condos and they have lots of equity there's so much stuff to do it's so much so many ways to make money people just you know they're like I don't have the money I don't have the credit what am I gonna do yeah and it's not the money or the credit because at some point you run out of money and you you know and you can use other people's credit in the bank also looks at real estate to pay them back not you trust me you know what I mean when I'm when I'm doing a two or three hundred unit building that's 30 million bucks you know and I'm trying to get a 20 million dollar loan yes they're looking at my credit but even if it's crap you know they're looking at the property okay how much does this property you know make every month and and because the property is gonna pay back the mortgage not me so you know the the credit piece is a cop-out and then I don't have any money as a cop out in my opinion opportunities and so basically wrapping it all up I also want to know what is a fight like the final action a millennial should take and one piece of advice you would give them yeah that well I had a younger age I would found a mentor I think that's probably the biggest one for me is you know find somebody for me it was my uncle yeah I saw he was my rich uncle right he you know you lived in Lincoln Nebraska and you know I'll never forget you know I just he just thinks differently talks differently you know he was a massively successful real estate investor and had a bunch of businesses and and he started as his kids in business and they're super successful and so I just was like he was like that rich uncle right and everybody's afraid to talk to I just sat down with him and he was incredible yeah just find somebody like that yeah I think I think that's incredible because we're always aimlessly consuming content whether it's on our phone or whatever and we're not realizing how much information we're putting into her head and so if we do find the mentor where we actually set I mean for me it was my dad and so I see yeah literally over the break I'm gonna see him and his time studying meetings and I thought at first it was gonna be a little weird but we told each other we step into that room and we are no longer related I mean this is just strictly mentor-student relationship and so I think what you said is just really trying to find someone whether it's your friend your uncle whatever it may be and setting time apart to study them when I was raising a family I found a guy that had six kids that wanted to be with him okay dude I don't know how you still have that like all your kids want to see you you know all the time yeah and they put you on this pedestal but I said that's what I want I started meet with him once a month that was you know it doesn't really matter if it's money or you just find people that are super successful in whatever it is that they're doing and go ask them and can I just have one more question as my mentor force what what are you actually ignited you or the the passion to write oh can you oh my gosh and what is it about it's a go it's awesome I'm super excited about this book actually it's it's generational wealth it's it's a 83 year old grandfather that never went to college and thought they needed to put their kids through college and they he did and then his daughter you know whose millennial and they every Sunday they meet for dinner and they talk about inflation is college worth it investing and the grandfathers perspective you know he's scrapped it out you know put together this place orchard Canyon that they got not long after the depression and you know they survived they survived the way that they had to survive but he did not have a college education and so he put his son through college I said you know you know go to school get a good job that in and out well the son isn't doing so well right he's got the big house in the car and all this stuff and so they're arguing and grandfathers you know he don't home and I don't know like maybe not was such maybe that education that you got you know because he's it's super finite and so it's a generational wealth story and Orchard Canyon oddly enough is a property that I owned with Robert and Kim it's a real resort Insadong yeah so it was easy to put the setting there yeah and it's a working orchard work it does per you know it as a restaurant and it's a hotel it's a resort so I just pulled all that in and you know the people that are on it before us that's what they did Wow and I think it's actually perfect book perfect timing for our audience because if you are wondering what to do with your life because we know a lot of Millennials don't know what to do it's a perfect guidance and so this could be a mentor in itself and I think it'd be perfect for everyone and we're gonna drop the description make sure to get it before it sells out because I know I'm gonna get my hands on the on this book and give it to all my friends because I think it's the perfect mentor right now for where we are in life no thank you alright you guys kept asking for a step-by-step guide on how to invest in real estate and we got you the X for himself now if you're still feeling a little stuck go ahead and grab this book and subscribe to our channel if you want to keep investing in your financial education bye guys [Music]

Channel: The Rich Dad Channel

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Keywords: TheRichDadChannel, rich dad poor dad, real estate investing, real estate tips, how to invest in real estate for beginners, ken mcelroy abcs real estate investing, robert kiyosaki, millennial money, alexandra gonzalez rich dad, real estate, investing for beginners, how to invest in real estate, real estate investing for beginners, real estate investing strategies, how to get started in real estate, passive investing, magic formula investing, investing in real estate

Id: _z_RoABsNro

Length: 35min 51sec (2151 seconds)

Published: Mon Feb 10 2020